HP Fight With Ex-Autonomy CFO Heats Up as Suit PledgedKaren Gullo
Hewlett-Packard Co. said former Autonomy Corp. finance chief Sushovan Hussain shouldn’t be allowed to challenge its deal with investors to sue him and company founder Michael Lynch over an $8.8 billion loss tied to its purchase of the software maker.
Shareholders who sued Hewlett-Packard directors and officers now agree that Hussain and Lynch “should be held accountable for this fraud,” the Palo Alto, California-based computer maker said in a filing yesterday in San Francisco federal court. They “inflicted billions of dollars of harm on the company.”
Hewlett-Packard acquired Autonomy, a U.K.-based software maker, for $10.4 billion in 2010. Hewlett-Packard claims it was a victim of fraud because Autonomy overstated its revenue growth and prospects. Lynch has denied the claims and said Hewlett-Packard mishandled the purchase.
Last month, Hussain sought court permission to intervene in the accord between Hewlett-Packard and shareholders, saying it illegally shields HP executives from blame for the botched deal.
The accord, which settles three shareholder suits against Hewlett-Packard, “seeks to forever bury from disclosure the real reason for its 2012 writedown of Autonomy: Hewlett-Packard’s own destruction of Autonomy’s success,” Hussain said in court papers. The deal requires the judge’s approval.
Hewlett-Packard said last year that the U.S. Justice Department and the U.K. Serious Fraud Office have opened investigations relating to Autonomy after Hewlett-Packard accused the company of misrepresenting its performance.
In a court filing yesterday, Hewlett-Packard said Hussain knows “that prosecutors on both sides of the Atlantic are investigating him, that Hewlett-Packard is cooperating with those authorities.”
Lillian ArauzHaase, a spokeswoman for U.S. Attorney Melinda Haag in San Francisco, said she can’t confirm or deny the existence of an investigation.
Jina Roe, a spokeswoman for the SFO, said in an e-mail that the Autonomy probe is continuing and declined to comment further.
Hussain hasn’t been charged with any wrongdoing.
“Ask yourself why they waited a year after a merger which was vetted by hundreds of HP employees and agents, before and after, before claiming fraud (to support an almost $9 billion writedown) and then ask yourself why, if they are so concerned about fraud, HP has been scared to sue anywhere for three years,” John Keker, a lawyer for Hussain, said in an e-mail.